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Investing.com - Goldman Sachs has reiterated its Buy rating and $257.00 price target on Cintas (NASDAQ:CTAS) following the company’s fourth-quarter fiscal 2025 earnings release. According to InvestingPro data, the stock currently trades at a P/E ratio of 48.8x, suggesting premium valuation levels compared to historical averages.
The uniform rental and facility services provider reported robust organic revenue growth of 9.0% year-over-year in the fourth quarter, accelerating from 7.9% growth in the previous quarter and exceeding Goldman Sachs’ forecast of 7.2%.
Cintas demonstrated margin improvement with gross margins expanding 50 basis points year-over-year to 49.7%, while operating margins increased 20 basis points to 22.4%, reflecting operating leverage and efficiency gains.
The company’s newly introduced fiscal 2026 revenue guidance surpassed market expectations, although its earnings per share guidance at the midpoint came in slightly below consensus estimates.
Goldman Sachs expects investors to focus on several key areas during the earnings call, including macro environment impacts on customer spending, new business growth in the no-programmer uniform rental market, cross-selling opportunities, and cost efficiencies contributing to margin expansion.
In other recent news, Cintas reported its fiscal year 2025 earnings, with revenue reaching $10.3 billion and earnings per share of $4.40, slightly surpassing both consensus and Citi’s projections. The company also provided guidance for fiscal year 2026, projecting $11.1 billion in revenue and $4.78 in earnings per share at the midpoint. Citi maintained its Sell rating on Cintas, citing concerns over lower-than-expected earnings per share guidance and margin issues. Stifel reiterated its Hold rating, noting that Cintas’s revenue, earnings per share, and free cash flow all exceeded analyst estimates, with strong growth driven by its First Aid & Safety and Other divisions. Meanwhile, Wells Fargo (NYSE:WFC) upgraded Cintas to Equal Weight, highlighting the company’s potential to gain market share from its competitor Vestis, which could enhance earnings per share by 19%. RBC raised its price target to $240, maintaining a Sector Perform rating, and emphasized Cintas’s ability to outperform expectations and its strategic focus on key vertical markets. Conversely, Redburn-Atlantic downgraded Cintas to Sell, expressing concerns over the company’s valuation and suggesting an 18% downside potential due to economic headwinds.
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